Walmart to sell its Chinese e-commerce arm to Alibaba's rival JD.com

Walmart plans to sell its Chinese e-commerce business, Yihaodian, to JD.com, the largest B2C online retailer in China and a major competitor to Alibaba-run Tmall. In exchange for the sale, Walmart will receive 144,952,250 newly-issued JD.com Class A ordinary shares, representing a 5% stake in JD.com and said to be worth about $1.5bn (£1.02bn, €1.32bn) at the Chinese retailer's current valuation.

According to a press release by the American multinational retailer, the deal includes many business initiatives, in both the online and offline retail space. Walmart will benefit as the deal will help expand its opportunity in China's e-commerce industry. Its stores and its Sam's Club, the membership-only retail club, will get access to JD.com's 100 million plus customers apart from JD.com's vast same-day delivery network to serve its customers.

JD.com will benefit by leveraging Yihaodian's strong brand and business in eastern and southern China. It will also get access to key product categories such as high-quality grocery and household goods of Yihaodian, both of which complement JD.com's own geographical and product strengths.

Additionally, JD.com will benefit as its customers, post the deal, will get access to Walmart and Sam's Club's new and imported product portfolio.

As part of the deal, JD.com will take complete ownership of the Yihaodian marketplace platform assets. This would include the Yihaodian brand, website and app.

Walmart will continue its role of operating the direct sales business of Yihaodian apart from continuing to being a seller on the Yihaodian marketplace. Both the companies will combine their efforts and work together in growing both the Yihaodian business and the Yihaodian brand.

"JD.com shares similar values in making the lives of customers better. It also has a very complementary business and is an ideal partner that will help us offer compelling new experiences that can reach significantly more customers. We also look forward to offering customers a tremendous number of quality imported products not previously widely available in China through Walmart and Sam's Club," Doug McMillon, president and CEO of Walmart, said.

Richard Liu, CEO of JD.com, said: "Walmart is synonymous with trusted-quality efficient retailing, and we believe that this tie up will increase both product selection and overall user experience."